Something is missing

The Jim Smith book is a good recommendation.   Should not be an issue with your gear if set up well. 

How far are the speakers from the rear wall?  Focal tends to spec the best spacing to be 1-2' from the rear wall.

One thing I noticed with your speakers, they have an impedance dip of around 2.5 Ohms in the bass. That's a tough impedance and will show differences among weaker amps.

First, try different spacing to the rear wall.

The front of the speaker is about 2 feet from the wall. The Rotel is 200 wpc so no slouch or at least I did not think unless I am relying on the wrong power spec

There is nothing wrong with the internal dac in the Sony HAP-Z1ES. I own two of them, 1 for each system. I get jaw dropping sound from it in my main system and in my other system. It was rated A+ by Stereophile and it got some kind of award in TAS. I tried an Aurender N100H with a top line Wyred4sound dac2 DSD SE with Femto clock and all the other goodies and the Sony bested it hands down. The Aurender went back and I sold the Wyred dac. The software for the Sony is very good as well.  I see no reason for myself to look for something better.

@stereo5 - Do you like the DSD upsampler on the Sony ? . The blue light indicates it is on on the front ? I went a year not using it in a setup . Different amp / pre and now I am liking the DSD upsampler . I also tried a Exogal dac and the Sony sounded better . It is a great piece of gear . It really is too bad there is no Tidal or Quboz . Any particular power cord you have found good with it ?
Sorry to the op for hijacking